The information that follows relates to equipment owned by Headlands Limited at December 31, 2020: Cost Accumulated depreciation to date Expected future net cash flows (undiscounted) Expected future net cash flows (discounted, value in use) Fair value Costs to sell (costs of disposal) $9,180,000 1,020,000 7,140,000 6,477,000 6,324,000 51,000 Assume that Headlands will continue to use this asset in the future. As at December 31, 2020, the equipment has a remaining useful life of four years. Headlands uses the straight-line method of depreciation. Assume that Headlands is a private company that follows ASPE. 1. Prepare the journal entry at December 31, 2020, to record asset impairment, if any. 2. Prepare the journal entry to record depreciation expense for 2021. The equipment's fair value at December 31, 2021 is $6.63 million. Prepare the journal entry, if any, to record the increase in 3. fair value. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Date Account Titles and Explanation Debit Credit (1) December 31, 2020 (2) December 31, 2021 Depreciation Expense Accumulated Depreciation - Equipment (3) December 31, 2021 no 0 No Entry Repeat the requirements in (a) above assuming that Headlands is a public company that follows IFRS. (Credit account titles are automatically indented when the amount is entered. Do not indent manually. If no entry is required, select "No Entry" for the account titles and enter O for the amounts.) No. Date Account Titles and Explanation Debit Credit (1) December 31, 2020 Loss on Impairment 1942500 Accumulated Impairment Losses - Equipment 194250 (2) December 31, 2021 (3) December 31, 2021 Accumulated Impairment Losses - Equipment Recovery of Loss from Impairment